Imagine managing your finances by simply gliding your finger across a smartphone screen. No juggling apps, endless forms, or frustrating waits. Instead, a seamless experience that anticipates your needs and delights you at every turn. This is the promise of frictionless finance, and integrations are the magic key to unlocking it.

The Indian financial services sector will grow rapidly out to 2035, driven by rising incomes, heightened government focus on financial inclusion, and digital adoption – India's digital payments could pass $1 trillion by 2030. With this rapid growth, the expectations of customers are also evolving. Having experienced hyperpersonalized customer service in other sectors like ecommerce and OTT, they now anticipate the same experiences in the financial services industry. They expect seamless interactions, tailor-made services, and instant resolutions.

Responding to this changing customer behavior, financial organizations are becoming more aware of how crucial customer experience (CX) is for engaging customers, retaining them, and building their brand value. In fact, 83% of financial services organizations see improved customer experience as a top driver for AI adoption.

Achieving frictionless CX for financial services

The key to delivering frictionless CX in financial services or ‘frictionless finance’ lies in streamlining financial processes through advanced technologies, automation, and data analytics. This strategy reduces inefficiencies and manual interventions and fosters a financial ecosystem where data moves seamlessly and decisions are made swiftly, enhancing operational speed, accuracy, and agility.

Roadblocks to frictionless finance

While there are multiple opportunities for the financial services ecosystem to drive truly delightful CX, or frictionless finance, these are a few challenges that block the way:

  • Legacy infrastructure: Many traditional financial institutions in India still use legacy technology and infrastructure. These systems are often inflexible and not designed to interface smoothly with modern, cloud-based platforms, slowing down digital transformation.
  • Fragmented ecosystem: The Indian financial ecosystem is highly fragmented, with multiple players and systems, including traditional banks, fintech startups, payment service providers, and non-banking financial companies (NBFCs) - operating in silos.  This hinders the data flow and uniform experiences.
  • Cybersecurity and privacy concerns: As financial services become increasingly digital, the risk of cyber threats and data breaches grows. Ensuring robust security measures without compromising on user experience is a complex challenge.
  • Regulatory hurdles: India's financial sector is governed by stringent regulations designed to protect consumers and ensure the financial system's stability. While necessary, these complex and evolving data privacy and financial security regulations sometimes create hurdles for innovative solutions.
  • Standardization and interoperability: The Indian financial ecosystem still lacks standardized data formats and APIs, making communication and data exchange between players difficult and inefficient.
  • Data privacy and management: With strict regulations around data privacy, such as the Personal Data Protection Bill, managing customer data in a way that is both compliant and conducive to improving CX is a complex issue.
  • Digital literacy and accessibility: A significant portion of India's population still lacks basic digital literacy and access to digital technology. This gap prevents them from getting a seamless customer experience in their financial transactions.
  • Language and cultural diversity: India's linguistic and cultural diversity means financial services must be tailored to cater to multiple languages and cultural nuances. Providing personalized and inclusive CX across such a vast spectrum is daunting.
  • Customer trust and perception: Building and maintaining trust in digital financial services is a critical aspect of CX. Overcoming skepticism, especially after incidents of fraud or data breaches, is a major hurdle.

Addressing these roadblocks requires a joint effort from both the government and private sector, including investments in digital infrastructure, education, and regulatory frameworks that encourage innovation while protecting consumer interests.

The power of integration

An integration platform acts as a versatile, secure, and regulatory-compliant bridge, connecting old and new technologies to deliver an efficient and unified customer experience in the financial sector.  

Integration solutions-

  • Enable seamless integration between outdated legacy systems and modern cloud-based platforms, facilitating digital transformation without extensive system overhauls.
  • Ensure secure data handling and transmission, employing encryption and compliance with privacy standards, thus safeguarding sensitive financial information.
  • Offer adaptability to regulatory changes, allowing financial institutions to remain compliant with minimal effort by automatically updating to meet new regulatory standards.
  • Solve interoperability issues by standardizing data formats and APIs, ensuring smooth communication and exchange across the financial ecosystem.

Related read: Integration: How Banks & Financial Institutes Can Benefit From iPaaS

Driving frictionless finance through integrations

The role of integrations in enhancing customer experience within financial services lies in its ability to connect different systems and platforms seamlessly and automate business processes.

Through (APIs), financial companies can link various services and data sources together, enabling them to share information in real-time. This means customers can enjoy a unified and streamlined experience, whether checking balances, making payments, or accessing different financial products. Automation simplifies business processes, reducing the chances of errors and delays.

This seamless operation across different services ensures that customers receive personalized, immediate, and consistent services regardless of the platform they use.

Here are a few ways integrations can help financial service providers offer a great CX:

Unified account views

Account aggregation services, powered by secure API integrations, allow financial institutions to pull data from multiple sources into a single platform and offer customers a unified view of their financial status across various accounts and services. This holistic view enables them to do better financial planning and management.

Seamless omnichannel experience

Financial institutions can offer captivating experiences across web, mobile, and social media platforms by implementing an effective integration strategy for the applications they use in their operations. This ensures customers enjoy a smooth interaction on their preferred devices while experiencing a uniform brand journey across all touchpoints with the company’s offerings.

Effortless onboarding and transactions

The integration of instant payment systems like UPI has significantly enhanced CX by enabling real-time transactions. Similarly, seamless onboarding processes facilitated by API integrations between banks and third-party services reduce paperwork and waiting times, making acquiring new financial products swift and hassle-free.

Personalized financial products and services

By leveraging integrated data, financial institutions better understand customers’ behavior, preferences, and financial history and can create personalized financial products and services for them. The digital-savvy millennials and Gen Zers, making up 34% and 27% of India’s population, prefer to do their investments themselves and expect banks to offer personalized services that meet their specific needs.

Data showing customers prefer personalized financial services
Source: The Connected Financial Services Report, a global survey report by Salesforce

24/7 support through chatbots and AI-powered assistants

AI-powered chatbots and virtual assistants have become integral to providing round-the-clock customer support. Integrated with financial systems and capable of accessing customer account information, these bots can answer queries, execute transactions, and provide financial advice instantly, elevating the level of customer service.

Sense of trust and security

With rising cyber crimes, customer’s anxiety about the security of their financial data is real. Integration platforms have a variety of security measures to protect sensitive data and comply with privacy regulations. This enables financial institutions to safeguard their customers’ data while delivering data-driven customer experiences. This fosters a sense of loyalty and security in the customers’ minds.

Graph showing that compliance to data security is crucial to gaining customer's trust
Source: The Connected Financial Services Report, a global survey report by Salesforce

The prospects for the financial services sector are indeed thrilling. However, it's critical for these companies to embrace digital technologies and data analytics to cater to the needs and expectations of millennials and Generation Z, ensuring a technologically driven, comprehensive customer experience.

Many financial services organisations like Axis Bank, Yes Bank, Fincare Bank, DMI Finance, Flexiloans, GMoney, and more use Quickwork to build and manage their integrations and offer delightful CX to their customers, employees, and partners.